[Federal Register: August 17, 1995 (Volume 60, Number 159)]
[Notices]
[Page 42848-42849]
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CONSUMER PRODUCT SAFETY COMMISSION
Announcement of Amnesty and Conditions Under Which the Staff Will
Refrain From Making Preliminary Hazard Determinations
AGENCY: Consumer Product Safety Commission (CPSC).
ACTION: Notice.
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SUMMARY: Section 15(b) of the Consumer Product Safety Act
requires manufacturers, distributors, and retailers of consumer
products distributed in commerce to notify the Commission of
certain defects, unreasonable risks or non-compliance with
voluntary or mandatory standards. Firms that fail to report are
subject to civil penalties. The Commission is announcing a one
time amnesty for firms who have failed to report in the past. The
Commission is also announcing the staff will forego making a
preliminary hazard determination when firms report and within 20
working days implement corrective action acceptable to the staff.
DATES: This action announces that the staff of the CPSC will not
seek penalties under any of the rules or acts it administers
against firms who report under section 15(b) of the CPSA from
August 17, 1995, to February 13, 1996, potential hazards the firm
failed to report prior to the amnesty period. The staff will meet
with interested members of the public September 12, 1995 at 10
a.m. to discuss this initiative and a second initiative announced
in this notice.
FOR FURTHER INFORMATION CONTACT: Theresa Rogers, Office of
Compliance, CPSC, 4330 East West Highway, Bethesda, MD 20814
(Mailing address: Washington, D.C. 20207), telephone (301)
504-0608, extension 1363, or Eric L. Stone, Office of Compliance,
CPSC, 4330 East West Highway, Bethesda, MD 20814 (Mailing
address: Washington, D.C. 20207), telephone (301) 504-0626
extension 1350.
SUPPLEMENTARY INFORMATION:
A. Reporting Amnesty
Section 15(b) of the Consumer Product Safety Act (CPSA), 15
U.S.C. 2064(b), requires manufacturers, distributors and
retailers of a consumer product distributed in commerce to notify
the Commission when they obtain information which reasonably
supports the conclusion that their product (1) fails to comply
with an applicable consumer product safety rule or voluntary
standard relied upon by the Commission under section 9, (2)
contains a defect which could create a substantial risk of
injury, or (3) creates an unreasonable risk of serious injury
or death. The Commission published a rule interpreting this
provision at 16 CFR Part 1115. Firms that knowingly fail to
report are subject to civil penalties under sections 19(a)(4) and
20(a)(1) of the CPSA, 15 U.S.C. 2068(a)(4) and 2069(a)(1).
Similar penalties exist for failures to report under section 37
of the CPSA, 15 U.S.C. 2084, and section 102 of the Child Safety
Protection Act, Public Law 103-267, 108 Stat. 722 (1994), and for
violations of various safety rules in Title 16 of the Code of
Federal Regulations.
For years, the Commission has been concerned that many firms
are not complying with their reporting obligations under section
15(b) of the CPSA. Despite the efforts of CPSC and various
industry and legal groups to publicize the requirements, some of
this failure is undoubtedly due to ignorance of the law. Many
other factors also play a role. Once a firm has failed to report
it finds itself in a quandary. A late report subjects the firm to
civil penalties and the stigma associated with failure to comply
with the reporting obligation in the first instance. Fear of such
penalties could cause some firms to hide their problems.
To address this fear, the Commission is announcing a one-time
amnesty program. The staff will not seek penalties under any of
the rules or acts it administers against firms who report under
section 15(b) of the CPSA from August 17, 1995, to February 13,
1996, potential hazards the firm failed to report prior to the
amnesty period. The amnesty will not be available for any product
reported prior to the date of this Federal Register notice, nor
will it apply to firms who are currently under investigation for
a failure to report or other violation of the Commission's laws.
Firms will not receive amnesty for failures to report based on
reporting obligations that arise between August 17, 1995, and
February 13, 1996.
This amnesty is intended to encourage firms to ``clean out
their closets'' of matters that should have been reported in the
past. While firms may report such matters without fear of
penalty, the staff will still seek corrective action when such
action is needed to protect the public from a possible
substantial product hazard.
B. Staff to Forego Preliminary Determinations When Firms Initiate
Timely Corrective Action
In the past, the Commission staff has made a preliminary
hazard determination as to whether a product presents a
substantial product hazard (section 15 of the Consumer Product
Safety Act, 15 U.S.C. 2064), or contains a defect which creates a
substantial risk of injury to children (section 15 of the Federal
Hazardous Substances Act, 15 U.S.C. 1274), whenever it receives a
report under section 15(b) of the CPSA. See 16 CFR 1115.12(a).
Some firms have expressed concern that the preliminary
determination, although not a formal hazard determination
of the agency, could have a negative impact in their product
liability cases or on their reputation. From August 17, 1995,
until February 13, 1996, on a pilot basis, the staff will forego
such preliminary determinations for firms that report in a timely
and complete manner and implement within 20 working days after
filing an initial report a corrective action the staff believes
will be effective. For purposes of this pilot program,
``implement'' means issuance of a news release or other form of
public notice approved by the staff commencing the corrective
action.
This pilot project does not modify firms' reporting
obligations. Firms who have an obligation to notify the
Commission under section 15(b) or section 37 of the CPSA, or
section 102 [[Page 42849]] of the Child Safety Protection Act,
must continue to do so even then they believe the risk does not
warrant corrective action.
At the end of the pilot period, the Commission will evaluate
the effectiveness of this initiative and determine whether it
should be extended.
The staff will only forego preliminary determinations for a
firm that:
a. Files a Full Report (See 16 CFR 1115.13(d)). Currently,
many firms do not submit complete information. Firms sometimes
omit copies of complaints and claims. This information is crucial
for the staff to properly evaluate the problem and the firm's
corrective action. The staff will not allow firms that do not
report fully to participate in this pilot program.
b. Advises the staff it wishes to undertake an expeditious
corrective action under the pilot program.
c. Submits a proposed corrective action plan in sufficient
time for the staff to review the plan, analyze any replacement
product or repair, and work out the details of the corrective
action with the firm so that the plan can be implemented within
20 working days after the filing of the report. The plan shall
include the following:
(1) A description of the action to be taken (refund, repair,
or replacement) that will eliminate the identified risk.
(2) Sufficient product design, incident, and testing
information to allow the staff to determine whether the proposed
action corrects the identified problem and the problem is limited
to the model[s] and production dates identified by the firm. Such
information should include, but is not limited to: consumer
complaints, test data, engineering drawings, material
specifications, samples of product, and/or component parts, as
needed. If the needed information and documentation is being
compiled, but is not yet available, the firm must provide the
date it expects to forward the information to CPSC. CPSC staff
must have sufficient time to review the information and meet
the 20 working day time limit.
(3) Usually, the firm's proposed plan must include notice to
distributors, retailers, and consumers of the subject product.
The notice must describe the product, the hazard, the number and
type of injuries that have been reported, the type of injury that
may occur, and the action to be taken in plain language
understandable to the people to whom the notice is directed.
Generally, the plan must include a joint news release with the
Commission, letters and instructions to retailers and
distributors, point-of-purchase posters, and, depending
upon the level of risk, the population at risk, age and number of
products involved, there should be an additional notice.
Supplementary notice may include a Video News Release, print
and/or radio advertisements, incentives or bounties to encourage
consumer response, posters for specific audiences, such as for
posting in pediatricians' offices, medical clinics, national
parks and campgrounds, and repair shops (see Corrective Action
Handbook, available from CPSC Division of Corrective Actions). In
those cases where all purchasers can be contacted directly, a
news release may not be necessary.
(4) An agreement that the Commission may publicize the terms
of the plan and inform the public of the nature and the extent of
the alleged hazard. The consumer notice should be targeted to
reach a significant portion of the public likely to have
purchased the subject product. (See 16 CFR 1115.20(a) and CPSC
Corrective Action Handbook.)
(5) The corrective action plan and notice must be acceptable
to the staff. The staff will consider whether the corrective
action plan adequately addresses the risk of injury presented by
the product and whether the notice and corrective action plan are
designed to make the plan as effective as is reasonably possible
given the nature of the product and the risk. The Office of
Compliance staff will provide expedited review of each proposal
submitted and work with the firm to develop an acceptable
corrective action plan that can be implemented within the 20
working day period. The staff anticipates there may be cases
where a firm has submitted all the necessary information in
a timely manner but cannot implement the corrective action plan
within the 20 day period because the staff requires additional
time to evaluate a proposed corrective action plan and this delay
did not result from delay or fault on the part of the firm. It is
also possible that in some cases the staff and firm will agree
that notice and corrective action should occur at a later time
(such as in the case of a seasonal product). In both those cases
where delay is neither caused by, nor is the fault of, the firm,
the staff will not make a preliminary hazard determination.
If corrective action is implemented within the specified 20
working days, staff will provide written acknowledgement that the
firm has submitted information under section 15(b); that, based
on available information, the proposed corrective action plan is
adequate; and that the staff will monitor the progress of the
plan. The staff will advise the firm that the firm has a
continuing obligation to report new or different information that
may affect the scope, prevalence or seriousness of the defect or
hazard.
If the firm does not implement a corrective action acceptable
to the staff within the specified 20-day time limit, staff will
inform the firm that it will continue its evaluation and will
preliminarily determine whether the product contains a defect
that creates a substantial risk of injury to children under the
FHSA or presents a substantial product hazard under the CPSA.
Firms should not delay their reports under section 15(b) of
the CPSA in order to prepare a corrective action plan. The staff
will not forego preliminary determinations if the information
available suggests a firm delayed its initial report to prepare a
corrective action plan.
C. Meeting
The staff will meet with interested members of the public at
10 a.m. on September 12, 1995 to discuss these initiatives. The
meeting will be held in the Commission's hearing room on the
fourth floor of 4330 East-West Highway, Bethesda, Maryland.
Dated: August 7, 1995.
Sadye Dunn, Secretary, Consumer Product Safety Commission.
[FR Doc. 95-20429 Filed 8-16-95; 8:45 am]
BILLING CODE 6355-01-P